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Zespri boosts forecast payout to growers

Friday 22nd October 2010

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Zespri, the kiwifruit marketer, lifted its forecast payouts to kiwifruit growers as Asian demand returns to more normal levels.

Average fruit and service payments for growers are expected set to increase by $13.7 million or 15 cents a share, the company said.

“Market returns this season are up on last year and reflect strong consumer demand for Zespri kiwifruit,” said Carol Ward, director of corporate and grower services.

“However we are still facing challenging market conditions as the global economy emerges from the recession, with Japan and East Asia recovering more quickly than Europe and North America.”

The stronger returns are likely to throw a spanner in the works for rival Turners & Growers, which has been trying to win over growers to its cause as it challenges export restrictions placed on New Zealand-grown kiwifruit sold independently of the Zespri arrangement.

Orchard gate returns for Zespri Green growers are holding above the $4.00 per tray level and are up by 39 cents on the 2009/10 season.

A slower-than-anticipated recovery from recession-level pricing has impacted the Zespri Green Organic returns which are forecast to be down by 6 cents on last year.

Zespri Gold returns continue to increase and are forecast to be up by 99 cents on last season, due to strong demand combined with a lower-than anticipated crop volume due to seasonal factors.

Ward said the stronger New Zealand dollar had a positive impact on returns as the company’s hedging policy sets foreign exchange cover in place up to three years in advance to a season’s start.

“Had no hedging been in place for this season, average returns could have been up to 85 cents per tray lower than currently forecast,” Ward said.

The company said the last vessel of the season is due to depart the Port of Tauranga on Oct. 28, destined for Japan.

“With approximately 10% of the crop yet to sell, the focus is on increasing quality control processes onshore and in the markets to ensure quality remains at a high standard for late-season sales,” Ward said.

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